Tag Archives: David Cameron

Francis Maude, the Cabinet Office minister, describes as “nothing short of groundbreaking” a report of the Major Projects Authority which gives the RAG (Rred/Amber/Green) status of more than 100 major projects.

That the report came out late on Friday afternoon as most journalists were preparing to go home, some of them for the whole bank holiday weekend, suggests that the document was a negotiated compromise: it would be published but in such a way as to get minimal publicity.

Indeed the report is a series of compromises. It has the RAG status of projects but not the original text that puts the status into context.

Another compromise: senior civil servants in departments have persuaded Maude to publish the RAG decisions when they are at least six months old.

This enables departmental officials to argue their case in the “narrative” section of the MPA annual report that a red or amber/red decision is out-of-date and that there has been significant improvement since. This is exactly the DWP’s justification for the amber/red status on Universal Credit.

The DWP says in the MPA report: “This rating [amber/red] dates back to September 2012, more than seven months ago. Since then, significant progress has been made in the delivery of Universal Credit. The Pathfinder was successfully launched and we are on course both to expand the Pathfinder in July 2013 and start the progressive national roll-out of Universal Credit in October.”

That the Pathfinder was launched successfully might have nothing to do with Universal Credit’s amber/red status which could be because of uncertainties over how the IT will perform at scale, given the complexities and interdependencies. The MPA report says nothing about the uncertainties and risks of Universal Credit.

More compromises in the MPA annual report: the Cabinet Office appears to have allowed departments to hide their cost increases on projects such as HMRC’s Real-time Information [RTI] in the vague phrase “Total budgeted whole life costs (including non-government costs).”

The Cabinet Office has also allowed departments to write their own story to accompany the RAG status. So when HMRC writes its story on RTI it says that “costs have increased” but not by how much or why. We know from evidence that HMRC gave to the Public Accounts Committee that RTI costs have risen by “tens of millions of pounds”. There is nothing to indicate this in the MPA annual report.

Another compromise in the MPA annual report: there are no figures to compare the original forecast costs of a project with the projected costs now. There are only the 2012/13 figures compared with whole-life projected costs (including non-government projected spend).

And the MPA report is not comprehensive. It came out on the same day the BBC announced that it was scrapping its Digital Media Initiative which cost the public £98m. The MPA report does not mention the BBC.

The report is more helpful on the G-Cloud initiative, showing how cheap it is – about £500,000. But there is little information on the NHS National Programme for IT [NPfIT] or the Summary Care Record scheme.

Yet the MPA annual report is ground-breaking. Since Peter Gershon, the then head of the Office of Government Commerce, introduced Gateway reviews of risky IT projects about 12 years ago with RAG decisions, they have remained unpublished, with few exceptions. The Cabinet Office is now publishing the RAG status of major departmental projects for the first time. Maude says

“A tradition of Whitehall secrecy is being overturned. And while previous Governments buried problems under the carpet, we are striving to be more open. By their very nature these works are high risk and innovative.

“They often break new ground and dwarf anything the private sector does in both scale and complexity. They will not always run to plan. Public scrutiny, however uncomfortable, will bring about improvement. Ending the lamentable record of failure to deliver these projects is our priority.”

Comment

The MPA annual report is a breath of fresh air.

Nearly every sentence, nearly every figure, represents compromise. The report reveals that the Universal Credit project was last year given an amber/red status – but it doesn’t say why. Yet the report has the DWP’s defence of the amber/red decision. So the MPA report has the departmental defences of the RAG decisions, without the prosecution evidence. That’s a civil service parody of openness and accountability: Sir Humphrey is allowed to defend himself in public without the case against him being heard.

But it’s still useful to know that Universal Credit is at amber/red. It implies well into the project’s life that the uncertainties and risks are great. A major project at amber/red at this stage, a few months before go-live, is unlikely to turn green in the short term, if ever.

Congratulations

The Cabinet Office deserves congratulations for winning the fight for publication of the RAG status of each major project. Lord Browne, the government’s lead non-executive director and a member of the Cabinet Office’s Efficiency and Reform group, has said that billions of pounds of taxpayers’ money is being frittered away because of “worryingly poor” management of government projects.

“Nobody ever stops or intervenes in a poor project soon enough. The temptation is always to ignore or underreport warning signs,” he says.

The management of some large projects – usually not the smaller ones – is so questionable that departments ignore advice to have one senior responsible owner per major project, says the MPA.

The MPA annual report will not stop the disasters. Its information is so limited that it will not even enable the public – armchair auditors – to hold departments to account. Senior civil servants have seen to that.

But the report’s publication is an important development: and it provides evidence of the struggle within Whitehall against openness. Francis Maude and Sir Bob Kerslake, head of the civil service, have had to fight to persuade departmental officials to allow the RAG status of projects to be published. The Guardian’s political editor Patrick Wintour says of the MPA annual report

“Publication led to fierce infighting in Whitehall as government departments disputed the listings and fought to prevent publication.”

Large-scale change

If Maude and Kerslake struggled to get this limited distance, and there is still so much left to reform, will large-scale change ever happen?

Maude and his officials have as comprehensive mandate for change from David Cameron as they could hope for. Yet still the Cabinet Office still seems to have little influence on departments. When it comes to the big decisions, Sir Humphrey and his senior officials hold onto real power. That’s largely because the departments are responsible to Parliament for their financial decisions – not the Cabinet Office.

Maude and his team have won an important battle in publishing the MPA annual report. But the war to bring about major change is still in its very early stages; and there’s a general election in 2015 that could halt Maude’s reform plans altogether.

Prime Minister David Cameron’s announcement of a forthcoming ‘Co-operatives Bill’ to consolidate outdated pieces of legislation governing co-operatives and mutuals into a single statute has been heavily commented on in recent days.

Cameron said the Co-operatives Bill would cut red tape and help to build a fairer economy, ensuring that co-operative members can share in the benefits of enterprise.

Here is a round-up of coverage in the last few days about the planned bill and about co-operatives and mutuals.

David Cameron is due to meet the Big Six energy companies to persuade them to rein in their price increases.

But are we in danger of sleep-walking towards a Big Six in public services too? This piece by the excellent Craig Dearden-Phillips makes some strong points about a ‘possible cartelisation of public services’.

He argues that the government needs to be ‘more categoric about mutuals and social enterprises. This sector doesn’t really have much chance in a free-for-all. Government commitment to seeing a strong mutual sector, backed by the will to see it done, is what is needed now if the diversity spoken of in the public services white paper is to be more than just a wish-list. Diversity needs to be deliberately created as markets need to be ‘made’, he says.

Incidentally, an earlier piece by Dearden-Phillips refers to the situation in Stroud where a court order was successfully applied for to stop a social enterprise being formed to take forward former NHS services. You can read more about that case here

Much has been written about Central Surrey Health’s bid for a contract that has already prompted much jump-the-gun downbeat thinking about the prospects of mutuals. Baroness Jay was the latest to weigh in on the contract according to a report last week.

I would suggest that perhaps it’s time for a bit of perspective here. It’s one contract; and it’s not the only contract that Central Surrey Health is bidding for, I’m sure. Business’s fortunes don’t depend on one contract; they bid for numbers of pieces of work. They win some; they lose some. Hopefully they win more than they lose.

I would expect that if Central Surrey Health has lost this opportunity – and I have yet to hear any public comment from it that it has – then it is already looking ahead to the next one – or ones – after that. And then further opportunities too.

Surely the fortunes and prospects for the mutuals sector don’t just rest on the back of one NHS mutual, and one contract. A bit more positivity and perspective wouldn’t be a bad idea.

Andrew Tyrie’s comments about the Big Society perhaps haven’t been overwhelmingly helpful when it comes to promoting the growing role of mutuals and co-operatives. Hopefully when David Cameron gives his keynote speech at the Conservative Party Conference in Manchester on Wednesday, he’ll have some more positive things to say about open public services, and specifically something about the well-flagged funding and procurement issues.

It seems as if with the party conference season not far off, discussions are taking place around the edge of government over energy policy, which may have some implications down the line as far as business energy costs and climate change legislation are concerned.

It follows a leak to the Daily Telegraph of a note to David Cameron discussing the impact of energy and climate change policies on energy prices, Although the focus of the letter is on consumer energy prices, it is possible that a wider review may also need to examine the effect of government policies in the form of climate change legislation on businesses.

The letter suggests that four policies stand out as having the most significant impact on household energy bills: carbon pricing (both the carbon price floor and the EU emissions trading scheme), the new Energy Company Obligation, the Electricity Market Reform package and the Renewables Obligation.

The letter goes on to ask whether policies can be opened up, particularly support for relatively high-cost technologies such as offshore wind, in a way that minimises cost and disruption to investment.

It’s possible that, as the Guardian suggests, the leaked letter is part of a sabre-rattling exercise ahead of the conference season. On the other hand, with consumers strapped for cash, energy prices on an ever upwards spiral, and businesses struggling in a stagnant economy, a healthy debate over energy policy is perhaps not a bad idea, though, as the Guardian headline puts it, that risks pitting fossil fuels against renewable energy.

Several people have asked us whether the Cabinet Office’s Major Projects Authority will cancel CSC’s NPfIT contract or whether draft memorandum of understanding between the Department of Health and the supplier will be finalised and signed.

The position is that a deal with CSC has not yet been agreed – and it’s not clear when it will be. Recommendations from the Cabinet Office’s Major Projects Authority have gone to David Cameron, according to yesterday’s Observer.

We’ve also been asked whether the The Major Projects Authority has any authority over CSC’s NPfIT contracts.

In January Downing Street gave the Cabinet Office a mandate to “intervene” in projects that are poor value for money, have hit delays or are failing. If there’s a dispute between the Major Projects Authority and a department, the Cabinet Office can ask David Cameron for a decision. So if the Major Projects Authority wants to cancel the CSC NPfIT contract it can – up to a point.

If the DH doesn’t agree, and it probably wouldn’t, it would be up to Cameron, who would probably back the Cabinet Office’s decision. It would then be the DH that dealt with the consequences.

The Major Projects Authority is under a clear-thinking Australian David Pitchford who is understands what goes wrong with big IT projects and why. He reports to Ian Watmore who also has a good understanding.

These are some of the reasons Pitchford gives for failing government IT-based projects:

1.Political pressure

2. No business case

3. No agreed budget

4. 80% of projects launched before 1,2 & 3 have been resolved

5. Sole solution approach

6. No timescale

7. No defined benefits

Most of these apply to the NPfIT.

One view about what should happen is that at least the part of the CSC contract that relates to acute hospitals should be cancelled, and the NHS should be under no further contractual obligation to buy from CSC – that was always an artificial device. CSC should be under no further obligation to deliver to the NHS.

CSC’s obligation has been a means of Whitehall, through CSC, maintaining some control over trusts and justifying a large central team. End that obligation and you don’t need a large central team. Last week’s Public Accounts Committee report on the NPfIT detailed care records systems said that NHS CfH has 1,300 people.

Whatever happens CSC will maintain a strong presence in the NHS, at least through its purchase of iSoft. Many trusts with iSoft systems are likely to replace them with iSoft – CSC – products. Patient administration systems are huge investments and changing them can be risky.

EC procurement rules mean that trusts will need to go open tender when their existing contracts expire but some will find ways of awarding new contracts to existing suppliers, if that’s their wish.

So CSC’s future in the NHS is assured, whatever happens with its NPfIT contracts.

The excellent King’s Fund report released yesterday on social enterprise in healthcare made some interesting points on employee ownership and risk in social enterprises and mutuals.

It said: “Evidence from other sectors (the commercial industry, and other public services to a lesser extent) largely focuses on the employee ownership model. In the UK, there is considerable evidence based on the John Lewis Partnership, a major retailer and the UK’s largest employee-owned organisation. However, much of the literature in this field is from the United States, where a significant proportion of the workforce (more than one-fifth) is financially involved in their organisation.

“Literature from the private sector is predominantly supportive of employee ownership, and suggests that there is a positive link between employee ownership and productivity, innovation and job satisfaction. This literature is based on the argument that, by giving employees a stake in their organisation, they will be more engaged and potentially more productive.

“However, Ellins and Ham report evidence that suggests that employee ownership may slow down decision-making and generate a risk-averse culture. A review of the literature by Matrix Evidence also suggests that any productivity gains are not immediate, but become stronger over time.

“The relationship between employee ownership and staff engagement is quite complex. It has been suggested that employee ownership does not automatically lead to greater staff participation, but that staff participation is necessary for the development of a successfuland productive employee- organisation. The literature suggests that the main benefit of employee ownership is greater staff involvement in decision-making, which is associated with a stronger tendency for organisational innovation. However, the direct link between ownership and staff satisfaction is much less clear.

“In commercial industries, employee-owned firms tend to have a lower risk of failure. They are able to create jobs quickly, and are at least as profitable when compared to conventionally structured businesses. Further, a survey by the Social Enterprise Coalition found that social enterprises were twice as confident of future growth compared with small- and medium-sized enterprises (SMEs) (48 per cent as opposed to 24 per cent of SMEs). Additionally, since the recession began, 56 per cent of social enterprises have increased their turnover from the previous year (compared with 28 per cent of SMEs).”

The other week when David Cameron launched the Open Public Services White Paper, he suggested that the Civil Service (and perhaps other
enterprises too) would need to adopt a risk-taking culture.

“The biggest challenge for the Civil Service is to try and adapt to this new culture and also a very difficult thing to do, and an easy thing to say, is that actually civil servants will have to take some risks. We all know that in business it is very easy to award the contract to Price Waterhouse. They’ve done it before, they’re an enormous organisation, they won’t fail. I think there’s a similar tendency within the Civil Service. It’s safe to keep it in house and deal with one of the big providers.

“If we really want to see diversity, choice and competition, we have to take some risks and recognise that sometimes there will be a new dynamic social enterprise that has a great way of tackling poverty or drug abuse or helping prisoners go straight, and we do need to take some risks with those organisations and understand that rather like in business, when you have a failure, that that doesn’t mean that the Civil Service has done a disastrous job.

“In business, we try new things in order to do better, and when they don’t work, we sit back and think, ‘How do we do that better next time?’ We do need a sense of creativity and enterprise in our Civil Service which is clearly there….a change of culture, perhaps a different attitude towards innovation and risk and a sense that that will be a good way of driving performance.”

Interesting then that a blog post in the Harvard Business Review site discusses risk and argues that taking a risk is not immoral – as some might argue – and that “the world is full of people who sit on their high horses disparaging risk and risk takers. They counsel caution in order to gain moral stature, all the while making use of a thousand innovations made possible by the very people and practices they shun.”

It’s not the people who shun risks who are the saints, the author, Dan Pallotta, says. It’s the ones who dare to take them. Good piece – worth a read.

The Government, backed by the High St banks, has launched the Big Society Bank, to support organisations that invest in the sector, helping them:

Provide a greater range of financial services to social sector organisations;

Raise more money for onward investment into the sector; and

Become more sustainable and resilient themselves.

The bank, to be known as ‘Big Society Capital’ will, the Government says, also be a champion for social investment with policy makers, investors, stakeholders in the sector and the public at large. Venture capital pioneer, Sir Ronald Cohen, will serve as the unpaid, interim Chair of Big Society Capital Limited, the operating company of the group, until it is fully operational. Nick O’Donohoe, formerly Global Head of Research at JP Morgan, will become Big Society Capital’s first CEO.

The Government insists Big Society Capital will play a critical role in speeding up the growth of the social investment market. Socially orientated financial organisations will have greater access to affordable capital, using an estimated £400million in unclaimed assets left dormant in bank accounts for over 15 years and £200million from the UK’s largest high street banks. Big Society Capital and the four Merlin banks have also come to an agreement on heads of terms for the banks’ £200m investment in the company.

Couple of quotes, first of all from Prime Minister David Cameron:

“When I announced the idea of a Big Society Bank, I wanted to help social enterprises and other groups to grow and expand their vital work. I am delighted that with today’s announcement of the organisation’s first investment, this vision is becoming a reality. I’ve seen the amazing work that Britain’s social enterprises already do to tackle some of our country’s most intractable problems.

“I believe that Big Society Capital will play a major role in injecting significant resources and financial innovation into these social enterprises, while at the same time attracting further funding from charitable foundations, private individuals and other investors. That’s why I wholeheartedly welcome today’s launch and the organisation’s first investment.

And also from Cabinet Office Minister Francis Maude:

“There are few moments like this when something happens that can really change the world. We’ve all heard about a small charity or social enterprise sweeping away entrenched local social problems. But we have not seen a significant commitment to help social innovations grow and be implemented on the national stage until now. Big Society Capital will undoubtedly change this and unlock the money that charities and social enterprises need to grow when a big opportunity comes along. This government is proud to support this achievement. I want to thank Sir Ronald Cohen and Nick O’Donohoe and everyone else, including the banks, who have made this a reality so quickly.”

It would be a pity if David Cameron were forced to stand down over the phone hacking affair. Cameron is the force behind Francis Maude’s reform plans for central government, in particular the plans for finding and implementing innovative ways of cutting costs, mutualisation, simplifying and standardising ways of working and breaking the stranglehold of the few big IT suppliers to government. Cameron and Maude are trying genuinely to find ways of giving creative SMEs more government work.

Were Cameron to go, Maude would probably be much more isolated. As it is permanent secretaries would be more than happy to see Maude’s reforms melting away, though they would continue to express support for radical change. As the Cabinet Secretary Sir Arnold says in the first episode of “Yes Minister” on Open Government: “The less you intend to do about something, the more you have to keep talking about it.”

The signs we have seen are that Maude and his team are full of good ideas that some senior civil servants in departments would rather talk about than implement. We’ll shortly be publishing a piece on how officials at the Department for Work and Pensions still default to secrecy despite Maude’s attempts to change the mindset of the civil service.

Cameron will make some mistakes. Nobody is perfect. And prime ministers are always at the mercy of a previous Conservative prime minister, Harold Macmillan’s warning of “events, dear boy”.

Even Churchill made mistakes such as the Dardanelles landings. The media loves scalps and Cameron’s opponents will make the most of Murdoch’s woes. We hope for the sake of the reforms of central government – and the huge savings to be made – that Cameron stays.

A couple of recent pieces caught my eye, both of them from the Daily Telegraph. One discussed the state of the Coalition and whether, instead of being a catalyst for reform and change, the Liberal Democrats become the roadblock to it, and a surprisingly positive piece – for the Telegraph – about David Cameron by Peter Oborne.